The world's largest archipelago, Indonesia achieved independence from the Netherlands in 1949. Current issues include: alleviating widespread poverty, implementing IMF-mandated reforms of the banking sector, effecting a transition to a popularly-elected government after four decades of authoritarianism, addressing charges of cronyism and corruption, holding the military and police accountable for human rights violations, and resolving growing separatist pressures in Aceh and Irian Jaya. On 30 August 1999 a provincial referendum for independence was overwhelmingly approved by the people of Timor Timur. Concurrence followed by Indonesia's national legislature, and the name East Timor was provisionally adopted. On 20 May 2002, East Timor was internationally recognized as an independent state.

Geography

Indonesia

Location:

Southeastern Asia, archipelago between the Indian Ocean and the Pacific Ocean

17 August 1945 (proclaimed independence; on 27 December 1949, Indonesia became legally independent from the Netherlands)

National holiday:

Independence Day, 17 August (1945)

Constitution:

August 1945, abrogated by Federal Constitution of 1949 and Provisional Constitution of 1950, restored 5 July 1959

Legal system:

based on Roman-Dutch law, substantially modified by indigenous concepts and by new criminal procedures code; has not accepted compulsory ICJ jurisdiction

Suffrage:

17 years of age; universal and married persons regardless of age

Executive branch:

chief of state: President MEGAWATI Sukarnoputri (since 23 July 2001) and Vice President Hamzah HAZ (since 26 July 2001); note - the president is both the chief of state and head of government
head of government: President MEGAWATI Sukarnoputri (since 23 July 2001) and Vice President Hamzah HAZ (since 26 July 2001); note - the president is both the chief of state and head of government
cabinet: Cabinet appointed by the president
elections: president and vice president elected separately by the People's Consultative Assembly or MPR for five-year terms; selection of president last held 23 July 2001); selection of vice president last held 26 July 2001; next election to be held NA 2004; in accordance with constitutional changes, the election of the president and vice president will be by direct vote of the citizenry
note: the People's Consultative Assembly (Majelis Permusyawaratan Rakyat or MPR) includes the House of Representatives (Dewan Perwakilan Rakyat or DPR) plus 195 indirectly selected members; it meets every five years to elect the president and vice president and to approve broad outlines of national policy and also has yearly meetings to consider constitutional and legislative changes; constitutional amendments adopted in 2001 and 2002 provide for the MPR to be restructured in 2004 and to consist entirely of popularly-elected members who will be in the DPR and the new House of Regional Representatives (Dewan Perwakilan Daerah or DPD); the MPR will no longer formulate national policy
election results: MEGAWATI Sukarnoputri elected president, receiving 591 votes in favor (91 abstentions); Hamzah HAZ elected vice president, receiving 340 votes in favor (237 against)

Legislative branch:

unicameral House of Representatives or Dewan Perwakilan Rakyat (DPR) (500 seats; 462 elected by popular vote, 38 are appointed military representatives; members serve five-year terms)
election results: percent of vote by party - PDI-P 37.4%, Golkar 20.9%, PKB 17.4%, PPP 10.7%, PAN 7.3%, PBB 1.8%, other 4.5%; seats by party - PDI-P 154, Golkar 120, PPP 58, PKB 51, PAN 35, PBB 14, other 30; note - subsequent to the election, there has been a change in the distribution of seats; the new distribution is: PDI-P 153, Golkar 120, PPP 58, PKB 51, PAN 35, PBB 13, other 32
elections: last held 7 June 1999 (next to be held NA 2004)

Judicial branch:

Supreme Court or Mahkamah Agung (justices appointed by the president from a list of candidates approved by the legislature); note - the Supreme Court is preparing to assume administrative responsibility for the federal court system, previously run by the executive

Political parties and leaders:

Crescent Moon and Star Party or PBB [Yusril Ihza MAHENDRA, chairman]; Federation of Functional Groups or Golkar [Akbar TANDJUNG, general chairman]; Indonesia Democracy Party-Struggle or PDI-P [MEGAWATI Sukarnoputri, chairperson]; National Awakening Party or PKB [Alwi SHIHAB, chairman]; National Mandate Party or PAN [Amien RAIS, chairman]; United Development Party or PPP (federation of former Islamic parties) [Hamzah HAZ, chairman]

two equal horizontal bands of red (top) and white; similar to the flag of Monaco, which is shorter; also similar to the flag of Poland, which is white (top) and red

Economy

Indonesia

Economy - overview:

Indonesia, a vast polyglot nation, faces severe economic development problems, stemming from secessionist movements and the low level of security in the regions, the lack of reliable legal recourse in contract disputes, corruption, weaknesses in the banking system, and strained relations with the IMF. Investor confidence will remain low and few new jobs will be created under these circumstances. In November 2001, Indonesia agreed with the IMF on a series of economic reforms in 2002, thus enabling further IMF disbursements. Keys to future growth remain internal reform, the build-up of the confidence of international donors and investors, and a strong comeback in the global economy.

Sipadan and Ligitan islands dispute with Malaysia remains with the ICJ for arbitration since 1998; East Timor-Indonesia Boundary Committee meets to survey and delimit land boundary; Indonesia seeks resolution of East Timor refugees in Indonesia; Australia-East Timor-Indonesia are working to resolve maritime boundary and sharing of seabed resources in "Timor Gap"

Illicit drugs:

illicit producer of cannabis largely for domestic use; possible growing role as transshipment point for Golden Triangle heroin